Rebooting India-Russia ties
Amb Kanwal Sibal

The international environment is changing, with new opportunities and challenges. India is not where it was since the early 90s. Our economic growth, even if it has been less spectacular than that of China, has changed international perceptions about India as a trade and investment partner. Our developmental needs remain formidable and governments have to satisfy rising public expectations. On many global issues, whether related to climate change, clean energy, trade and investment issues, India’s role has become more prominent. Our foreign policy has to be aligned to these new realities, and a new balance in external relations has to be forged in a way that our interests are optimally advanced.

As a consequence, our relations with the West, especially the US, have acquired a new salience. This has given rise to a perception that under Prime Minster Modi we have neglected our relations with Russia. This would not be an objective view. Modi has launched a host of development campaigns, such as such as Make in India, Digital India, Skill India, Smart Cities, Start-Up India, Clean India, and the like. For implementing them his government has to reach out to the advanced industrialised countries for partnership, as the technological, management and even financial inputs can best be obtained from them. In the fields of health, renewable energy, clean coal technologies, solar power, we are again being pulled towards the West, as is the case with innovation as a whole. Education and people to people contacts also drive us towards the English-speaking West, rather than to Russia.

Russia has, however, its own place in our foreign policy, underpinned by elements that our other relationships, even as they grow stronger for pragmatic reasons, lack to the same degree. Our ties with Russia are based on trust, strong bonds of friendship that have stood the test of time, geo-political understanding, a sense of reliability, shared views on the conduct of international relations based on respect for sovereignty, non-interference in the internal affairs of countries, multilateralism and the like. These are elements to be valued. The Modi government, as the governments before, understands the importance of our ties with Russia, irrespective of minor irritants that crop up occasionally because of Russia’s hard-headed pursuit of its own interests that emphasise commercial advantage over any nostalgia of the past. We have also to maintain stability and trust in our ties with Russia at a time when its relations with the West have sharply deteriorated and have pushed it towards China.

The belief that contacts with Russia have slowed down with the Modi government would be misplaced. Modi has had occasion to meet Putin on a few occasions, at the BRICS, G-20 and SCO summits (the last on Russian soil). During the year, our President participated in the Moscow celebrations to mark the the 70th Anniversary of Russia’s Victory in WW 2. The Russian Speaker has led a parliamentary delegation to India this year. Other important visits have been those of Russian Deputy Prime Minister Rogozin, who is in charge of relations with India, and the Russian Defence and Interior Ministers. On our side, our External Affairs and Defence Ministers have visited Russia this year.

Modi visited Russia on December 24 for the sixteenth India-Russia summit. The regularity with which these summits have been held ever since Putin acceded to power testifies to the value the two countries attach to them as occasions to take stock of the relationship, assess ongoing programmes, address issues, explore new areas of cooperation, all in a bid to keep cementing the relationship as well as building on it in all feasible areas.

Defence remains the most important pillar of our relationship with Russia. On the one hand, it provides an enduring base to our special and privileged strategic partnership, while on the other, it overloads the relationship in one area where any set-back is seen as a blow to the structure of the entire relationship. Our developing defence ties with the US, for instance, which have a logic of their own, are seen by Russia through the prism of its defence ties with us. We are also put in a position where we have to keep nurturing our ties with Russia with additional defence deals, even when problems relating to earlier ones are not fully resolved.

In his press comments in Moscow, Modi mentioned that we have made progress on a number of defence proposals that would boost defence manufacturing in India and our defence readiness with next generation equipment. He did not specify them, except the Inter-Governmental Agreement on manufacture of Kamov 226 helicopter in India as the first project for a major defence platform under the Make in India mission. Actually, this project was taken out of the tendering process and allotted to Russia during the 2014 summit in New Delhi as one to be implemented with the private sector. It would appear that the effort to identify a suitable Indian private sector partner has failed, with the result that HAL, which was to be excluded, will now participate in the implementation of the project and will be given the responsibility to identify the right private sector partner.

The Joint Statement issued on the occasion of Modi’s visit has a generally worded, bland paragraph on defence cooperation. Interestingly, Defence and Military-Technical Cooperation figures in it after Trade and Investment, Energy, Education and S&T, Culture and People to People Contacts and Space Cooperation. In actual fact, defence cooperation remains robust. Before Modi’s visit, we announced that the purchase of the potent S-400 Air Defence system from Russia had been approved by the Defence Acquisition Committee. It was obviously premature to identify it as a summit deliverable as a lot of negotiating work lies ahead. On the fifth generation aircraft the existing confusion about India’s interest and role in the project remains, though those in the know maintain that India is participating in the project, and that reports bout Russia going ahead with the project without India are not quite correct. Russia has built prototypes of the PAK-FA which is not yet a fifth generation fighter. Each prototype built contains new stealth features; it is a work in progress. India is therefore not out of the game. The contract for 4 additional frigates is also on track, but it could not be announced during the visit because all the contractual details have not been fully tied up yet. There is a component of Make in India in it.

Nuclear power cooperation is the second strategic pillar of our relationship. Modi said in Moscow that the pace of our cooperation in nuclear energy is increasing, with progress on our plans for twelve Russian nuclear reactors at two sites. The joint statement “welcomed progress in identifying the second site in India for additional six nuclear reactor units”. It was expected that the second site for which Russia has been pressing would actually be specifically announced, as it is not content with repeated reiterations at the political level that a second site would be identified. It appears that the decision for a second site in Andhra Pradesh has been taken by us, but we could not, and did not, want to announce the decision formally in Moscow as some prior administrative procedures have to be completed on our side and the desire to guard against public agitation of the kind that we saw at Kudankulam influenced the decision. India is keen that as Russia proceeds to construct 12 nuclear reactors, there should be progressive transfer of technology, with the 12th reactor giving us full domestic production capability. This might be too aspirational on our part, but we are insisting on localisation, the parameters of which will, however, be determined on a practical basis. Our goal is to embed localisation in the whole process of acquiring Russian nuclear reactors. The joint statement contains an agreement to actively work towards localization of manufacturing in India under the aegis of Make in India and in tandem with the serial construction of nuclear power plants. In this context, the finalization of Programme of Action for localization between RosAtom of Russia and the DAE has been welcomed by the two sides. With units 3 and 4 at Kudankulam already approved, it was expected that the General Framework Agreement on KK 5 and 6 would be announced. Both sides were negotiating intensively till the last minute to reach an agreement but could not do so. However, it is understood that the remaining ends will be tied up in the next few months.

India has long pressed for greater access to Russia’s abundant oil and gas resources, with limited success. It is only in recent years that Russia has been more forthcoming. Western economic sanctions and the need for cash resources for developing Russia’s vast reservoir of oil and gas account for greater readiness on Russia’s part to have Indian companies invest. We have an opportunity now that we should not miss. Modi noted in Moscow that India is enlarging its investments in the Russian hydrocarbon sector. Russia will expand LNG supplies to India by the Gazprom Group from the Arctic fields through joint projects in which our side is interested. ONGC Videsh limited has acquired 15% stake in Vankorneft, an oil field that we have long coveted, and may get another 10%. Rosneft is also in negotiations with Oil India on investments, having earlier "concluded some details of a deal" under which it will pick up 10 million tonnes of crude from Roseneft. In turn, Roseneft will pick up 49 per cent stakes in India's second largest oil refinery in Vadinar in Gujarat. Indian Oil Corporation Limited and Oil India Limited have signed a memorandum with Rosneft, which paves the way for acquisition of 10% stakes in Taas-Yuriakh oil assets in East Siberia.

The poor trade levels between India and Russia constitute a glaring weakness in our bilateral ties. At $ 10 billion trade between India and Russia is unconscionably low. This means that large sectors of our economy and entrepreneurs, especially in the modern sectors of our economy, are not sufficiently connected with Russia. Efforts in the past to expand trade through setting up several joint business groups have not borne fruit. The target of raising the trade turnover to $ 30 billion by 2025 fixed in the earlier summit and reiterated this time is decidedly ambitious. During the summit Modi and Putin addressed CEOs of Indian and Russian companies, about which Modi spoke positively. Putin has listed high technology, innovation, energy, aircraft building, pharmaceuticals and diamonds are promising areas for India-Russian cooperation. Of the 16 agreements and MoUs signed during the summit, the MoU for cooperation between HEC & CNIITMASH for upgradation and modernization of HEC’s manufacturing facilities, and the MoU in the field of investment cooperation in the Russian Far East between The Tata Power Company Limited and the local Ministry for Development, have considerable potential. A Free Trade Agreement between India and the Eurasian Economic Union has been under discussion. At the summit the Sides expressed support for early finalization of a draft Joint Study Group report to consider the feasibility of such an agreement.

With the breakdown of Russia-Turkey relations after the downing of the Russian bomber over Syria, on which Modi expressed full sympathy of the Indian people, the positive outcome of discussions between the phytosanitary and veterinary authorities of both the countries to finalize mutual market access for agricultural and processed food products, including dairy products was welcomed. Russia is very keen to source from India products it was importing from Turkey, and the summit document recognised this as a new and promising area for development and diversification of bilateral trade.

During the discussions in UNGA earlier this year, India was disappointed by the position Russia took on the start of text based negotiations on UNSC expansion. The summit’s joint statement removes the ambiguity on Russia’s position on UNSC reform and India’s permanent membership, with Russia regarding India as a deserving and strong candidate that can bring an independent and responsible approach within the UN Security Council and reaffirming its strong support to India’s candidature for a permanent seat in a reformed UNSC. In our summits with Obama and Abe we had signed on to bold formulations on the Asia-Pacific and South China Sea, disregarding Chinese sensitivities. Russia shows understanding of China’s position in this area. In Moscow we have used formulations that skirt concerns about freedom of navigation and overflights and have opted for more bland and non-controversial ones. The importance of the Russia-India-China (RIC) format finds mention in the joint statement.

India and Russia are threatened by terrorism and religious extremism. Our agencies may be working together closely to monitor the threat, but in joint statements that we draft with the Russian foreign ministry, the Russian side tries to avoid formulations that could be seen to be pointedly directed at Pakistan. The joint statement condemns terrorism in all its forms and manifestations, with a call for the elimination, once and for all, of all "safe havens" of terrorists. This is an all embracing formulation that covers the wider region and is not Pakistan specific. Modi himself has been pushing for the early completion of negotiations on the Comprehensive Convention on International Terrorism, which the joint statement endorses. However, there is no reference to the early trial of those accused of the 2008 Mumbai terrorist attacks. On other global issues, Russia has supported India’s early accession to MTCR and NSG as well as the Wassenaar Arrangement.

The joint statement expresses concern about the aggravation of the security situation in Afghanistan, including along its borders. Both sides recognize that terrorism and extremism pose the main threat to security and stability of Afghanistan, the region and beyond. In this regard, the need for joint and concerted efforts and cooperation among countries in the region to address the challenge of terrorism in all its forms and manifestations, including the dismantling of terrorist sanctuaries and safe havens and disrupting all financial and other support for terrorism, was emphasised. There are extensive references to Syria, Iraq and East Ukraine in the joint statement, essentially along the lines that Russia would have wanted. This could have been balanced by more supportive formulations by Russia on our Pakistan problem, without necessarily naming the country, but this did not happen.

Modi was right in saying in his joint press conference with Putin that he sees Russia as a significant partner in shaping a balanced, stable, inclusive and a multi-polar world. He stated that his conviction had deepened that this relationship truly meets the test of a special and privileged strategic partnership. He noted that Putin and he had a high degree of convergence in our positions on global issues. According to Putin, Modi's visit was very timely and would make it possible to "synchronise watches" on the main areas of cooperation between the two countries. It is understood that the Russian side was very satisfied with the summit. In which case, doubts that India had neglected its relations with Russia at some cost should be set at rest.


Published Date: 12th January 2016, Image Source: http://www.financialexpress.com
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Vivekananda International Foundation)

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